Greater China Appraisal ('GCA'), a leading professional valuation services provider in Hong Kong, was appointed by China Packaging Holdings Development Limited ('China Packaging'; 01439.HK), to provide value opinion on the business of Binghe (Xiamen) Information Technology Company Limited ('Binghe (Xiamen)') in supporting the 100% Binghe (Xiamen) equity acquisition project with a consideration of HK$ 440 million. The valuation report prepared by GCA was based on the Guideline Merger and Acquisition Method ('GMAM') under the market approach.

Details of the transaction: http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0229/LTN20160229302.pdf

The buyer, China Packaging, is engaged in the design, manufacturing, printing and sale of paper-based packaging products. The target, Binghe (Xiamen) is engaged in research and development, distribution and operation of online mobile games.

According to the 2016 China Mobile Game Report issued by iResearch, the total revenue in China mobile games market has made its record high of RMB 21 billion in 2016 Q1. Under the current momentum, the market is expected to show strong growth over the next couple of years. Kingnet Technology, being one of the Chinese game developers, is now powering up for global expansion with its first mobile naval game Thunder Fleet released for western markets while the location-based mobile game, Pokémon Go, is trying to get into the China market. A two-way window for both Chinese and international game developers could be built for mutual benefit, and fueling the opportunities in the peripheral markets.

The transaction, which involved a Hong Kong listed company acquiring the control of a PRC mobile game company through contractual arrangement, is one of the few successful cases approved since the release of the consultation draft of the new PRC Foreign Investment Law by the Ministry of Commerce of China in January 2015. SPDB International Capital Limited, acted as the financial adviser in this case, critically assessed the legal issues involved and the potential risks arisen therefrom and fully assisted the company to liaise with the related regulatory authorities of Hong Kong.

Commenting on the valuation project, Mr. Max Tsang, the Head of Business Valuation and Transaction Advisory Division of GCA, said "We are pleased to have this opportunity to contribute our expertise in mobile games world with this strategic acquisition project and we appreciate the trust from the management of China Packaging. Recently we have also been engaged for valuing various cloud platforms and providing solution for potential capital market actions. Fund raising enquires from mobile game companies are frequently received this year. We expect the ongoing investment in the technology sector by the large enterprises would economically add value to these enterprises. As such, the sentiment for technology sector will stay strong."

GCA was engaged in discussion with the management of the both companies for full understanding of the background, technical capability and vision towards the mobile game development. GCA liaised with the auditor and the related regulatory authorities and addressed the queries regarding on the data assumptions and methodology applied; and also provided detailed analysis and research of China's economy and market condition in order to address the auditors' queries on the basis of our valuation report.

About GCA

Established in 1997, GCA provides business and intangible asset valuation, real estate and industrial assets valuation, financial instruments valuation, mineral and energy valuation as well as business consulting services. It has undertaken valuation for over 400 listed companies in Hong Kong, China, Singapore, Australia, United Kingdom, United States and Germany.

GCA is a corporate member of The International Valuation Standards Council ('IVSC'), a regulated firm under The Royal Institution of Chartered Surveyors ('RICS'), an associate member of China Appraisal Society ('CAS') and a valuation institute recognized by State-owned Enterprises under the State-owned Assets Supervision and Administration Commission ('SASAC') of the State Council.

For further information, please contact Mr. Max Tsang at max.tsang@gca-group.com or +852 2511 6868.